The arrival of DSL (Digital Subscribers Line) High speed connections made digital computing far more attractive and entertaining. The emergence of various high-tech devices even made the World Wide Web a fascinating place for Juan and Pedro to spend their time.

I did engage in this type of business as I have mentioned before on one of my previous articles. I did earn a decent amount of money for quite some time while managing my own internet cafe business. But after six years of operation, I finally decided to give up and look for other income-generating solutions that are more compensating and rewarding.

I am not forcing nor misaligning our readers into not entering this kind of business since the success of each business may depend on various factors. But for the sake of this article, here are the points that made me decide on closing down my business:

SATURATION
When the prices of computer parts and internet services started to become cheaper and be made available to every Filipino household, Internet Cafes started to sprout like mushrooms out of nowhere. This made the competition even harder. Even government agencies did not have rules or guidelines for putting up one nor agencies to monitor pricing and operation. Establishing an Internet Cafe is just like putting up a sari-sari store (small type of convenience store).

PRICE WAR
Price has always been a deciding factor for some customers to frequently visit your place. But due to the emergence of numerous Internet Cafes, pricing your services is a difficult one. An Internet cafe owner will eventually be forced to lower his prices just to be competitive in the market until it finishes him off and soon the rest will follow. I was even forced to remove some of the perks and features just to cope with the competition.

COMPENSATION
Even if most people see that owning an Internet Cafe is worth the investment, now I can say that it is not. Sometimes I thought that I was saving enough money for my future but in the end I just realized I was saving it just for my business to survive. Most of the money that you‚Äôll get will be allocated in paying for the utilities that you have consumed throughout the course of your operation. You will save some fair amount of cash but I can say it is NOT worth the time and money. Hard work is not equally compensated.

TAXES
The city where I established my business on was not that helpful. For every year that I have operated my business, I always pay a higher tax rate even though I did not make good income for the previous year. Our local government even implemented different ordinances every time we renew our license forcing us to pay additional amounts. It is only during this time that I have proven that our government is indeed swimming in an endless sea of corruption.

There are other reasons why I say that the Internet Cafe is no longer a good business venture. Though where I failed some may be successful. Factors like location, market availability, number of available stations for rent and the services that you offer may change the game. But as long as there are no proper rules, laws or any institution that will monitor and support the operation of internet cafes, I will think twice before I open one again.

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Adrian is a full time entrepreneur, a tech connoisseur, and a part time CAD specialist. (Also a pianist and choir master most of the time.)
A graduate from University of Santo Tomas in Manila with a Bachelor's Degree in Architecture. Has an inert passion for arts, music and technological advancements.
Most of the time he writes articles about DIYs and tech tips based on his own experience

9 Responses to Putting up an Internet Cafe biz in the Philippines? Better think twice!

The I-cafe industry is becoming a band wagon. There is no solid regulating body present so everyone can put up this kind of business that it is not as competitive as a few years ago.

I closed mine because of the LGU’s unjustified collection of business taxes coupled with unfair competition at my place. No one near my vicinity operates legally (that is with business permits & software licenses). Plus the very low price of service that would surely kill every I-cafe that will be put up. Estimates confirms that an I-cafe nowadays will surely run for 3-6 months then will eventually close down due to bankruptcy.

If you decide on bailing out, make the decision as soon as possible so you would still have time to work on the remaining resources that you have.

I have at least earned enough savings during my shop operation and I have sold the remaining furntitures and equipments that before they totally lose their value and use the money for other possible income generating ventures.

Now I have more peace of mind as before and more opportunities ahead of me.

Find a suitable location for your venture which are likely to attract stable as well as casual customers. Locating near a school may attract younger customers or locate near other cafés or small shops to catch pedestrians in the area.